Rural Hospital in Iowa Sues Medicaid Insurers for Underpayments

Virginia Gay Hospital (VGH), a critical-access hospital in Vinton, Iowa, has a filed a lawsuit against three private insurance companies that oversee the Iowa’s Medicaid program. This is part of the privatization of Medicaid that was launched in Iowa in April 2016. The lawsuit alleges that the three insurance companies, Amerigroup, UnitedHealthcare, and AmeriHealth Caritas, illegally recouped overpayments from VGH by not paying for services under the International Statistical Classification of Diseases and Related Health Problems (ICD-10). VGH argues that this violates their contract since these companies are keeping a portion of patient reimbursement by claiming they are overpayments. This has resulted in the loss of thousands of dollars of patient revenue. The lawsuit also alleges that these companies do not have a functioning appeals process to decide on appeals in a timely manner. The lawsuit, initially filed in state court, has now been moved to a federal court.